Opening Bell 1 Jan | US reaches budget deal

Mumbai: A fiscal cliff may be averted in United States in 2013 after President Barack Obama said that an agreement to prevent tax hike is within sight. The tentative Senate deal lifts tax rates for households earning more than $450,000, marking the first time in about 20 years that officials in Congress have agreed to higher taxes, reports Financial Times.

US markets ended 2012 on a high note on hopes of the tentative deal. The S&P 500 Index gained 1.7%, Nasdaq Composite rose 2% while the Dow Jones Industrial Average advanced 1.3%.

Asian markets were trading higher on the first day of the year following firm cues from Wall Street. Hong Kong’s Hang Seng was flat, China’s Shanghai Composite was up 1.6% and Japan’s Nikkei Stock Average gained 0.7%.

In India, the current account deficit widened to a record high of 5.4% of gross domestic product in the September quarter from 4.2% during the same period last year, increasing the country’s vulnerability to external shocks. The rise in CAD to $22.3 billion from $16.4 billion was due to ballooning trade deficit and a slowdown in inward remittances.

The Government will begin cash transfer roll out with 26 schemes in 20 districts from today, against the earlier target of 34 schemes in 43 districts. Direct cash transfers of subsidies are seen as the ruling UPA government’s key electoral plank for the 2014 elections.

Kingfisher Airlines will continue to remain in focus following reports that it is looking to resume flights by March provided it receives regulatory approval. The airline’s licence was set to expire at midnight on Monday since it was not able to submit a revival plan, but the management said flying permit expiry was not a problem.

Coal India will see some action after Competition Commission of India launched a probe against CIL for raising prices to increase profits without making investments to develop infrastructure and ramp up production, reports Economic Times. Coal India’s net profit jumped 36% in 2011-12 despite a meagre 1% increase in output.

Tata Power will be in the limelight following a Business Standard report that it is in the process of setting up 12,500-megawatt generation capacity abroad in the next seven years. The company is looking overseas because of scarce fuel supply and delayed project approvals domestically.

Lastly, flying out of Delhi just got cheaper after the Airports Economic Regulatory Authority halved the airport development fees for both domestic and international passengers, reports Business Standard.